Varoufakis: Greece deal 'in about a week'

In a late night interview with the private television channel Star TV, Varoufakis said he thought creditors were also keen to reach a deal.

"I think we are very close," Varoufakis said. "Let's say [it's a matter] of about a week."

For almost four months, Greece's radical left-led government has been seeking an acceptable agreement with creditors from the 19-country eurozone and International Monetary Fund (IMF), who want economic reforms to secure a 7.2-billion-euro ($8 billion) cash injection.

That money, the final payment due from Greece's 240-billion-euro bailout program, could help Greece avoid bankruptcy and the possibility of introducing capital controls or even leaving the euro.

In the past few weeks, Greece has managed to pay its way using cash from reserve accounts, paying debts as well as its regular domestic commitments such as pensions and wages for state employees.

Not beyond the line

However, Varoufakis said he would reject any compromise that the Greek government considered to be "non-viable."

Athens has defended "red lines" beyond which it will not be pushed in its talks with the lenders. These include further pension cuts and increased market liberalization.

"I assure you that if we face a dilemma between paying a creditor who refuses to sign an agreement with us and a pensioner, we will pay the pensioner," Varoufakis told the television channel. "I hope we will be able to pay both."

Referendum idea 'not fair'

Varoufakis ruled out the possibility of a referendum on the terms of an agreement, saying it would effectively be a vote on whether to keep the euro as a currency.

"It would be unfair for Greek citizens to have to take a position on such a matter, answering with either a yes or a no," he said.

100 days of Tsipras - chaos, frustration and disarrayPrime Minister Alexis Tsipras, whose party Syriza aims to stick to its electoral pledge of not cutting pensions and announcing mass layoffs, said Athens had tabled detailed proposals for a viable deal.

But he warned that Greece is in a state of "financial strangulation," and criticized the lack of liquidity that the country was being subjected to.

"The lack of liquidity is neither the choice nor the responsibility of the Greek government," he said. "It is a tough negotiating tactic of our partners, and I do not know whether everybody in Europe feels proud of it," he said.

rc/cmk (AP, AFP, Reuters)